Shareholders&#8217; Annual General Meeting

Shareholders&#8217; Annual General Meeting

03 April 2007

“A policy for improving competitiveness – by strengthening productivity, improving the business environment and enhancing investments – is a sine qua non condition for ensuring a high growth rate for the future with the view to achieving real economic convergence, reducing unemployment and raising citizens’ standard of living” said Eurobank EFG CEO, Nicholas Nanopoulos, in his address to the Shareholders’ Annual General Meeting on Tuesday, April 3rd, 2007. Mr. Nanopoulos added that: “Improving the competitiveness of the Greek economy is a one-way street both for ensuring the necessary high growth rates in the future and reducing at a sustainable level our country’s dependence on a steady inflow of foreign capital. This necessity makes it a strategic priority to introduce broad structural changes in the economy focusing on a new operational model. This model relies on private entrepreneurship and corresponding rationalization of the state’s role. The private sector has already proven its ability to bring to the economy the necessary flexibility, openness, innovation and competitive profile. Another essential condition is modernizing the state’s functions by increasing transparency and reducing bureaucracy. In addition, the state can also assume a new role in support of private entrepreneurship that is expanding dynamically beyond national borders with a vision. The benefits for Greece are obvious: our country is becoming an economic pole with a strong presence and influence in a large geographical area and this represents a strategic priority and a historic challenge.”

Eurobank EFG CEO then went on to say that: “At the same time, structural changes will have to expand and intensify, including the use of new investment tools, such as PPPs, as well as the deregulation of closed markets and professions and liberalization of the labour market. Reforms are also needed in Education, with the view to building a modern, productive and high added value economy”. Mr. Nanopoulos described expectations for the current year as positive, given the fact that significant progress has been made in budgetary adjustment as reflected in the deficit’s drop below 3%, which means that the economy can be expected to exit the regime of fiscal supervision. He added that in the local market, prospects remain positive as there are is still ample room for the increase of banking operations in all sectors. At the end of 2006, household lending as a percentage of GDP was 41%, well below the eurozone average of 54%. On the other hand, the ratio of NPLs in Greece was 6% in September2006, significantly higher than the corresponding eurozone average of about 3%. This issue should be tackled through concerted action by both the banking sector and supervising authorities because NPLs raise the cost of money for borrowers”.

The Bank’s Chairman, Xenophon Nikitas, referring to the progress of the economy stressed that “further efforts are needed to shorten the competitiveness gap from our other European partners and drastically reduce the current account deficit that has been plaguing us for a long time and will unfortunately continue to do so in the coming years”. Speaking about Eurobank EFG progress in recent years he stressed inter alia that “since the beginning of the last decade, Eurobank EFG after a series of successful mergers and acquisitions associated with fast operational growth was able to create the terms and conditions for a strong position in the domestic market. We laid the difficult wager of consolidating six banks based on a new vision and the most up to date organization and operation standards. We have thus created a large banking group, with a strong and healthy capital base, a modern profile and innovative services and products. Eurobank EFG has not only brought a revolution in the retail banking sector but also a people-centered approach to its customer relations. Of course all this did not happen automatically or by chance. It is the result of a totally successful and carefully planned policy that is growing pace by pace, year by year, a strategy that has ensured for the Eurobank EFG Group a very strong presence in Greece at the end of 2006 and a significant presence in New Europe. At the end of 2006, the Group had 1,300 branches and points of sale in Greece and abroad and around 19,000 employees. Our strategy, combined with our comprehensive product range, high quality of service, qualified and dedicated staff has allowed the Bank to achieve financial results in 2006 which exceeded the Management Targets” In his concluding remarks, Mr. Nikitas emphasized the staff’s contribution to the attainment of goals that are “neither unrealistic nor overoptimistic, which is why we overshoot them despite the fact that we set the bar higher each time”.

Referring to the Bank’s progress in the last decade, CEO N. Nanopoulos said that: “Despite the relativelylarge number of acquisitions, our growth in the last ten years is mostly organic and is the result of the faster increase of ourvolumes compared to market rates. Our loans, in the last decade, expanded per annum on average by 48%, without including acquisitions. During that same period, client funds under management have risen by an annual average growth rate of 28%. This data testifies, in the best possible way, to the dynamism of our Organization which is, however, also linked to a high level of quality and return for our shareholders”.

Summarizing the performance of the last five years Mr. Nanopoulos stressed:

·The significant improvement in the Bank’s efficiency with the cost to income ratio dropping from 58.1 to 49.7% in Greece, one of the best in Europe.

·The improvement of loan portfolio quality with the NPLs ratio falling to 2.9 from 3.8% and

·An increase of net profit CAGR by 37% and ROE in excess of 25% in 2006 for Greece.

The expansion of Eurobank EFG activity in New Europe started at the end of the last decade from Bulgaria, Romania and Serbia. In these first wave countries, where the Group’s presence was already quite strong, the goal is to become, on a long-term basis, among the 3-4 leading banks in the financial sector. More recently, the Group extended its activities to Poland, Turkey and the Ukraine where prospects are highly promising.

In these large markets the Group can achieve satisfactory profitability rates even if it remains among the 10-12 largest banks.

At the end of 2006, the Group had about 800 branches, points of sale and business centers outside Greece. The objective is for these to exceed 1,400 at the end of 2009.

Moreover, in Greece and abroad, the Eurobank EFG Group employs about 19,000 people.

The business expansion outside Greece was particularly strong in 2006, with loan balances more than doubling. Net loan additions outside Greece reached 2 billion euros, with net loan additions in the last quarter of 2006 being almost five times higher compared to the average quarter of 2005.

According to Mr. Nanopoulos, “we have now reached a critical turning point that marks our Group’s transition to a new era, since following our development in Greece, we have created a new growth and profitability platform in New Europe countries. Thus we have built the best possible prospects for the future with the view to achieving steadily rising profitability levels and value creation for our shareholders. We estimate that until 2009, our operations in New Europe will be contributing at least 30% to the Group’s total revenues and 20% to net profit.”

Concluding, Mr. Nanopoulos presented Management’s new goals for the 3-year period 2007-2009, which clearly reflect the Group’s dynamic growth and strong market position. Specifically, the Bank will be aiming at:

The General Meeting approved the distribution of a total dividend of € 0.92 per share (including an interim dividend of € 0.36%) 23% higher than last year’s. The total dividend corresponds to a dividend yield of 3.7% on average share price in 2006. The Bank’s Management objective is a dividend policy that responds to shareholders expectations and trust. It is worth noting that in the five-year period 2002-2006, dividend CAGR was 24%.

As from Thursday 5 April 2007 the share will trade ex-dividend on the Athens Stock Exchange, while payment of dividends will start on April 16th, 2007. The General Meeting also approved the distribution of 2 new shares for 10 old shares. It is expected that new shares will start trading on the ASE around mid-May.

The General Meeting was attended by the Governor of the Bank of Greece, Nikolaos Garganas, the President of the Hellenic Bank Association and Chairman of the National Bank, Takis Arapoglou, the Deputy Governor of the Bank of Greece Nikolaos Paleokrassas and members of the economic, business and social community.